Search results

Frontmatter -- Contents -- Preface -- LIVING WITH CHINA -- Introduction -- 1. China's Rise: Getting Its House in Order -- 2. China as a Global Innovator? -- 3. Creating a Leading Financial System: A Work in Progress -- 4. China Invests Abroad: A New Era of Chinese Capital -- 5. The Belt and Road Initiative: China Reaches Out -- 6. Living with China: Canada Finds Its Way -- Acknowledgments -- Notes -- Index

"Until the global financial crisis, China was thought to be decades away from overtaking the United States as the world's largest economy. But while the US skirted economic stagnation, China was able to successfully navigate the crisis, and its growth continues to accelerate. Has the time arrived to re-evaluate our assumptions about the current world order? Will China openly contest the United States' status, unchallenged since the Second World War, as a world leader? Will conflict be inevitable, or would its costs be unthinkable in a globalized world economy?"--Front flap

This book explores how governments and business in Asia and the Pacific can apply the key insight that one of the reasons economies grow is because of human-capital formation - the quality and diversity of the labour force are augmented - not just because the labour force grows in size. It includes chapters on conceptual and measurement issues; country experiences in meeting the imperatives of demographic transition and investment in education and skills training; and experiences of attracting foreign knowledge and the supply and recruitment of skills across borders in Asia and the Pacific

"Until the global financial crisis, China was thought to be decades away from overtaking the United States as the world's largest economy. But while the US skirted economic stagnation, China was able to successfully navigate the crisis, and its growth continues to accelerate. Has the time arrived to re-evaluate our assumptions about the current world order? Will China openly contest the United States' status, unchallenged since the Second World War, as a world leader? Will conflict be inevitable, or would its costs be unthinkable in a globalized world economy?"--Front flap

As Canada becomes more of a destination for Chinese outward foreign direct investment (FDI), Canada's review policies should incorporate international best practice based on an accurate understanding of the evolving regimes in China governing foreign direct investment FDI and its state-owned enterprises (which account for two-thirds of China's outward investment). This article focuses primarily on Chinese state-owned enterprises (SOEs) in both an international and a Chinese context. What is driving their outward investments and those in Canada in particular? Does Canada's policy response accurately account for the evolving regimes in China? This article concludes that China's regimes governing FDI and SOEs are becoming more transparent and market oriented whereas Canada's policies, until late in 2016, have remained opaque and interventionist. However, the investment hub proposal made recently portends some warming and greater transparency.

Although the United States is finally showing signs of some slow economic recovery, in global terms North America is in relative decline as large emerging-market economies, particularly China, show much more promise for growth. But Canada, having relied on a north-south pattern of diplomacy and trade with the United States, is not well positioned to become part of this new economic world order. China is paying attention. It has not escaped notice among the Chinese that Canada has been largely absent from the Asian region and its institutions in recent years, relying only on the inertia of a few longstanding bilateral relationships. An occasional visit to China by Canada's prime minister is not an encouraging sign — for Canada or China — of the Canadian government's commitment to building a more robust relationship, particularly when other countries have ongoing dialogue with China at the highest levels. And Canada's hesitance to join the Trans-Pacific Partnership, and a generally half-hearted attitude toward striking Asian free-trade deals, cannot have left China believing that Canada is serious about pivoting toward the Pacific. Indeed, new restrictions that further obstruct the ability of stateowned enterprises, from China and elsewhere, to invest in Canada likely signals that we are even outright hostile to the idea of forging deeper Asian ties. If Canada is to ensure that it is strategically well positioned for an era of rising Asian power, it must learn to think more like a Pacific nation, and not strictly an Atlantic one. The expanding Asian middle class will soon demand improvements in health, education, financial, environmental and urban services: These are things that Asians know Canada can do well, and they would welcome Canada's expertise in developing these services. But Canada must show itself eager to integrate further with Asia, deepening relationships in the region's nascent economic and security institutions. Canada can also begin acting on longstanding recommendations that it promote itself as a Pacific "location" for Asian multinationals: Calgary marketed as a global centre for unconventional energy research; Vancouver as an ideal headquarters for Asian multinationals operating in the West; and Toronto as a Pacific-oriented international centre of yuan-based finance. Rightly or wrongly, Canada is developing an international reputation as a difficult place to invest, and a country that is fairly indifferent to the potential that is already beginning to unfold in China and elsewhere in Asia. With so much of our economic future at stake, it is a reputation we must immediately begin working to reverse.

In December 2012, after Ottawa approved the takeover of Canada's Nexen by the state-owned Chinese oil giant, CNOOC Ltd., Prime Minister Stephen Harper offered an explanation to clarify the government's evolving position on takeovers from foreign state-owned enterprises. But rather than clarifying, the government succeeded instead in adding further ambiguity to an already opaque approvals process. Such takeovers would face "strengthened scrutiny" over the extent and nature of the foreign government's corporate control, he said, and would only be permitted in "exceptional circumstance." In other words, an approvals process already contingent on subjective judgment — thanks to the lack of transparency inherent in the pivotal "net-benefits test," and the onus it puts on the bidder to prove itself a worthy buyer — would now involve even more layers of subjective judgment. This is particularly ironic given that, as Canada's foreign-investment rules become cloudier and more prone to government interference, in China itself, regimes governing foreign direct investment (FDI) and state-owned enterprises are becoming increasingly transparent and market-oriented. The government's enhanced stringency may be a response to popular fears that China is "buying up" Canadian assets. Such fears are, for the time being at least, overblown: China's global outward FDI stocks are still lower than Canada's, and a fraction of those held by the U.S., the U.K. and Germany — although China will undoubtedly continue to expand its foreign investment portfolio. But China's investment strategies are little different these days than those of western investors: China's government has planned to reduce its role in commercial decision-making, and seems more comfortable with allowing both nationalized and (increasingly) private businesses to pursue growth based on maximizing shareholder value, rather than enhancing national security. Moreover, modern governance practices are now gradually being introduced to the Chinese corporate world, with boards becoming more independent from the state, and improved transparency in accounting and auditing practices. Whatever worries Canadians may have about Chinese state-owned enterprises investing in Canada, raising investment barriers is a blunt and flawed solution. Rather than block Chinese capital, Canadian regulators should monitor the behaviour of all firms to ensure standards are met for safety, environment, labour laws, transparency and national security. Closing off Canadian companies to Chinese bidders can hurt Canada's economy. It could increase risk for, and discourage, private-equity investors who often see foreign takeovers as a possible exit strategy, while potentially sheltering poorly managed firms from takeovers, dragging down our economic efficiency. Furthermore, Canada may well need access to Chinese capital in order for the oilsands to reach their full economic potential. The Canadian Energy Research Institute estimates that, to achieve full development, the oilsands will require $100 billion in capital investment to 2019. Currently, Chinese investment controls roughly two per cent of Canada's total FDI stocks. If that proportion remained constant, China could — based on the projected scale of its FDI by 2020 — provide 40 per cent of the estimated funding required to optimally develop the oilsands. If Canadian markets prove hostile, Chinese capital will, of course, find assets elsewhere. But as long as regulators enforce practices that safeguard Canadian interests, there is no reason for Canada to impede Chinese investment. Indeed, there is good reason to encourage it.